Medical-pot dispensaries in legal limbo; cities shut them down

Originally published March 24, 2011 at 9:29 pm
Updated March 25, 2011 at 11:00 am

Cities across the region have moved to shut down a combined 35 medical-marijuana dispensaries since February, a crackdown driven in part by a little-noticed memo from a municipal-insurance risk pool.

Green Hope Patient Network, a medical-marijuana collective in Shoreline, received its business license in November, and recent visits from the King County sheriff and the fire marshal gave no indication the nonprofit was at risk.

But without warning last month, Shoreline revoked its license and took action against two other medical-marijuana dispensaries.

The timing puzzled Green Hope and others. The Legislature appears poised to legalize and regulate dispensaries as part of a sweeping overhaul of the 1998 initiative legalizing medical marijuana. The state Senate has authorized the bill, SB 5073, and a House committee passed it Wednesday.

But cities across the region are not waiting for Olympia to act, and at least four have moved to shut down a combined 35 dispensaries since February. Three other cities have passed or debated outright moratoriums on dispensaries.

Those actions aim to rein in an uncontrolled boom — a “green rush” — in medical-marijuana dispensaries. Although they operate in a legal gray area, dozens of dispensaries have emerged from the shadows since early 2010 to apply for business licenses and insurance and to form lobbying groups.

The crackdown is driven in part by a little-noticed memo from a municipal-insurance risk pool, which emphatically stated that dispensaries are illegal and not entitled to business licenses. That opinion prompted Shoreline to action.

Prosecutor differs

It is not a universal opinion. On Thursday, King County Prosecutor Dan Satterberg said he believes dispensaries operate in a “legal gray area” but are necessary to help patients.

He pointed to charges his office filed Thursday against three people for an armed takeover-style robbery at a West Seattle dispensary last Saturday as evidence that dispensaries need regulation, including security requirements.

The case “highlights the urgent need for legislative policymakers to establish clear guidelines for the medical use of cannabis,” he said.

Laura Healy, co-founder of Green Hope, said she is appealing the revocation, but sounded empathetic to Shoreline.

“I think the cities are just trying to protect themselves, since it’s such a gray area. They’re trying to force the Legislature to step up to the plate,” she said.

As dispensaries began pressing for business licenses last year, cities in turn pressed the insurer, the Washington Cities Insurance Authority, with similar questions. Are dispensaries legal, and do we have to issue licenses?

In December, Mark Bucklin, general counsel for the risk pool, gave an emphatic answer: “No!”

Although dispensaries are incorporated as nonprofit collectives and say they are funded by donations, Bucklin wrote that dispensaries appear to be simply selling marijuana, making them illegal businesses and not deserving of a business license.

“If it walks, talks and quacks like a sale then it is a sale regardless of how the applicant may try to characterize it,” Bucklin wrote.

In an interview, he also doubted whether patients needed medical marijuana. “I think we’re talking about convenience and ease of access for people with a hangnail,” he said.

Bucklin’s memo helped galvanize cities. Tacoma, which had issued cease-and-desist letters to eight dispensaries last October, issued letters to 19 more dispensaries last week. A city spokesman, Rob McNair-Huff, said those enforcement actions likely will be stayed pending the outcome of legislation in Olympia.

“This is a tough issue,” he said. “There is a legitimate need [for access to medical marijuana]. This is why we need to get clarity from the Legislature.

In addition to Shoreline, Lake Forest Park and Federal Way also have moved to close dispensaries that opened after being denied business licenses on the grounds they were operating illegal businesses.

“These municipalities are panicking and coming up with dumb answers,” said Douglas Hiatt, a Seattle attorney who represents dispensaries. “These [dispensaries] are trying to help people get medicine.”

Earlier this week, the founders of one nonprofit dispensary, Conscious Care Cooperative, appealed their license revocation to Federal Way’s hearing examiner. The cooperative’s attorney, Aaron Pelley, said dispensaries give patients a third option to obtaining marijuana, other than growing their own or buying it illegally.

He emphasized that the cooperative’s model hews to the current law, which allows a designated provider to treat one patient at a time. “A decision to close this business is akin to setting off a bomb in the city,” driving patients to street drug dealers, Pelley said.

Support for bill

In Olympia, the bill that would resolve legal questions about dispensaries appears to be gaining support.

In addition to legalizing dispensaries, the proposal, SB 5073, would license and regulate commercial grow operations and food processors. It would provide protection from arrest and prosecution for medical-marijuana patients who join a new, voluntary registry.

Law-enforcement groups oppose the dispensary provisions, and some medical-marijuana advocates oppose new restrictions on how medical providers can authorize cannabis use for patients.

The bill, written by Sen. Jeanne Kohl-Welles, D-Seattle, passed the Senate by a mostly party-line vote earlier this month. It is co-sponsored by a former police officer, Sen. Jerome Delvin, R-Richland.

Rep. Jim Moeller, D-Vancouver, said it appears likely to be passed by the House. He said cities that are cracking down are “overreaching” in an effort to control the growth in dispensaries.

“I think they’d be very supportive of this law because it would give them the authority they need (to regulate dispensaries) and comes at it in a logical way,” he said.

But future laws don’t help cities now, said David Cline, city administrator for Lake Forest Park. His staff effectively shut down a dispensary — a second Conscious Care Cooperative outlet — last week for failing to get a building permit and for opening after being denied a city business license.

The city cannot give a license to an illegal business, he said. And based on the risk-pool memo and his own staff research, the dispensary didn’t comply with the law.